Earns JC Penney

(AP Photo/Mark Lennihan, File)

JC Penney 3Q Revenue Falls Short, Shares Slide

Industries Reuters

J.C. Penney reported a surprise 0.8 percent fall in quarterly comparable-store sales on Friday, reflecting weak traffic, increased competition from online and off-price retailers and a general shift away from spending on apparel.

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Analysts on average had expected Penney's same-store sales to increase 2.7 percent in the third quarter ended Oct. 29, according to research firm Consensus Metrix.

The big miss sent the retailer's shares down 9.3 percent in premarket trading.

Penney and other traditional retailers have been struggling to overcome intense competition from online retailers such as Amazon.com and off-price outlets such as T.J.Maxx, which offer deep discounts on apparel.

Penney, which caters mainly to lower-income shoppers, joins its closest rivals in reporting a drop in same-store sales in the latest quarter.

Macy's, the biggest U.S. department store operator, reported a 2.7 percent decline while Kohl's same-store sales fell 1.7 percent.

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Penney's net sales fell 1.4 percent to $2.86 billion, missing analysts' average estimate of $2.95 billion, according to Thomson Reuters I/B/E/S.

The company's net loss narrowed to $67 million, or 22 cents per share, in the quarter from $115 million, or 38 cents per share, a year earlier.

It was the company's 11th straight quarterly net loss.

Excluding items, Penney lost 21 cents per share, in line with estimates.

Still, the company was upbeat going into the holiday shopping season.

"We are excited about the initiatives we have in place to drive incremental growth during the holiday season," Chief Executive Marvin Ellison said in a statement.

J.C. Penney also said it was on track to achieve $1 billion in earnings before interest, taxes, depreciation and amortization (EBITDA) in 2016, and the company reaffirmed its full-year earnings forecast that calls for positive adjusted earnings per share.

 

(Reporting by Siddharth Cavale in Bengaluru; Editing by Ted Kerr)